Is There Such A Thing As A 'bad Ip Neighborhood'?

I'm just wondering if it's possible that the hosting company you're with can affect how search engines perceive your site? Just as there might be 'bad link neighbourhoods', is it likely that search engines can just write off an entire class C IP range of servers?

I'm hosting my VPS on Burstnet at the moment, because they're affordable and I get what I want from their service, but I know that they're also quite popular with spammers and other people you might want to club with a bat.

Long-term, I'd like to move to a more local, fully-managed service, when I can afford it, but am I likely hurting my efforts to build up qualified traffic by hosting with someone like Burstnet? I'm already having the experience from Hell in trying to get Yahoo! to accept emails from my VPS because it's automatically rejecting them.

And as the "class 'C' range was from 192.0.0.0 to 223.255.255.255 (minus the 'private' range of 192.168.0.0/24 (192.168.0.0 to 192.168.255.255) most people who babble on about "class 'C' IPs are talking out of their backsides!!! (to put it nicely)

A Google employee recently indicated in their Webmaster Help Forums that in very rare, exceptional cases an entire ISP hosting service can be penalized/blocked by Google. That's about as "negative" as it can get.

I have yet to run into a situation where neighboring IP addresses seemed to have a toxic effect over any Websites I have created either for myself or on behalf of others. I have worked on a large number of low-threshold hosting services. I think that you can trust that in most cases the search engines are going to let the Websites sink or swim on the basis of their own merits or misbehaviors.